The new rate represents a 9.8 per cent increase when compared to N1,400 to a dollar it traded at the close of trading activity on Friday.

This came as the Senate through its Committee on Finance called for concerted efforts by all relevant stakeholders to rescue and sustain its stability.

The senate said there was an urgent need for concerted efforts to tackle the instability and continuous depreciation of the Naira.

Currency traders at the popular Wuse Zone 4 market, who spoke with one of our correspondents on Sunday, blamed trading uncertainty of the market as reason for the fluctuations in the exchange rate.

They added that the government must either to choose to increase the currency value or devalue for market stability.

The operators did not provide a selling rate for Sunday, citing the absence of trading activity.

A trader, Malam Yahu Ibrahim, said operators were taking too much risk trading the naira due to its instability.

He said, “We take risks against ourselves every day because I don’t know how they are doing it, the naira is just swinging. “If the government wants to bring down the dollar totally, they should do it or if they want the naira to fall, they should do it and not allow it to fluctuate. It is killing businesses.”

“We are not even seeing the effect of the CBN dollar sale to BDCs, we are not seeing any effect.”

Another trader, Abubakar Taura, had in an earlier interview, expressed caution in trading activity, citing ongoing concerns that the CBN might take some drastic measures to stabilise the naira.

He noted that they couldn’t guarantee or predict what the rate would be on Monday (today) due to the volatile nature of the market.

The recovery in value coincides with plans by the Association of Bureaux De Change Operators of Nigeria to unify the retail end of the foreign currency market.

ABCON President, Aminu Gwadabe, said the move would tackle volatility and boost regulatory compliance within that segment of the market.

President Bola Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, made this call in a statement via his X handle on Thursday.

The presidential aide urged speculators to quickly dump their dollars to avoid “tears.”

He stated, “With backlog FX settled, Naira is set to appreciate further, faster. Currency speculators should quickly dump their stock of dollars to avoid sorrows and tears.”

Onanuga was reacting to the Central Bank of Nigeria, CBN, disclosure that it had cleared the $7 billion foreign exchange backlog inherited by Governor Yemi Cardoso.

In a statement on Wednesday, CBN’s Acting Director of Corporate Communications, Mrs Hakama Sidi Ali, confirmed the settlement of all valid FX backlog claims.

Ali said the apex bank employed Deloitte Consulting, an independent auditing firm, to meticulously assess the transactions, ensuring that only legitimate claims were honoured.

“Any invalid transactions were referred to the relevant authorities for further investigation,” she stated.

The CBN’s commitment to tackling the FX backlog appears to be paying off, with the external reserves seeing a significant rise, reaching $34.11 billion as of March 7, 2024, the highest level in eight months.

This indicates a loss of 3.93 per cent fall or N58 from the N1,476.13/$ the national currency closed last week Friday, according to FMDQ Exchange, a platform that publishes official foreign exchange trading in the country.

Monday’s official rate became the worst official exchange rate since the Central Bank of Nigeria floated the national currency in June 2023.

However, at the parallel market on Monday, the naira traded between the rate of N1,480 and N1,490. It appears the local currency has been trading higher at the parallel market in recent times especially since the FMDQ reviewed the methodology it uses to calculate the official exchange rate.

The change in the methodology for the calculation of the official exchange rate had led to the depreciation of the naira from over 900/dollar to over 1,400/dollar.

Sometime in December, the naira closed above the N1000/$ on the official window. On December 8, the naira first fell to an all-time low of N1,099.05/$. On December 28, 2023, it closed at N1043.09/$, and N1035.12/$ on January 3, 2024. On January 9, 2024, it closed at N1089.51/$ and N1082.32/$ on January 10, 2024. It had also fallen  to an all-time-low of N1348.63/$ on January 30, 2024, when the FMDQ reviewed its methodology for the calculation of the official exchange rate.

Meanwhile, dollar sales by banks dropped by 56.58 per cent to $253.77 million on Friday from the peak of $584.53 million on Monday, the first trading day after the CBN ordered banks to sell excess dollars in the official FX market.

Cumulatively, commercial banks sold a total of $1.97bn in one week.

Currency traders in Abuja, also known as Bureau De Change operators, quoted the buying rate of the greenback at N1,480 and the selling price at N1,503, leaving a profit margin of N23.

Mallam Yahu, a BDC operator in Wuse, said, “We currently buy between the rate of  N1,480 and N1,490, and we sell at N1,500 and N1,503.”

Another seller, simply identified as Yahaya Abdul, however said he could not buy beyond the rate of N1,460.

The currency fell by 27.19 per cent from the N856.57/$ it closed on Monday, according to data from the FMDQ Securities Exchange.

On Tuesday, the naira opened trading at N922.22/$, rose to a high of N1251/$ and low of N720/$ before closing at N1089.51/$.

Total forex turnover on the day was $97.45m.

This is the fourth time the naira will close below N1,000 on the official window.

On December 8, 2023, the naira fell to an all-time low of N1,099.05/$, on December 28, 2023, it closed trading at N1043.09/$, on January 3, 2024, the national currency closed at N1035.12/$.

Tuesday’s N1089.51/$ is the second lowest the naira has closed on the official FX window since the Central Bank of Nigeria removed the rate cap of the currency.

The naira’s continued decline is despite the apex bank’s effort to clear backlogs of matured foreign exchange obligations to the Deposit Money Banks. Recently, the CBN stated that it has paid $2bn as part of its backlog obligations.

Reports estimate that the bank is owing $7bn as forward contract obligations. The CBN disclosed this when it revealed it has disbursed $61.64m to foreign airlines as part of matured foreign exchange owed to them.

The CBN Acting Director of Corporate Communications, Hakama  Alia, said, “These payments signify the CBN’s ongoing efforts to settle all remaining valid forward transactions, to alleviate the current pressure on the country’s exchange rate.

“It is anticipated that this initiative by the CBN should provide a considerable boost to the Naira hug against other major world currencies and further increase investor confidence in the Nigeria economy.”

Also, this current depreciation of the naira against the dollar is in the face of the government’s renewed effort to boost liquidity in the foreign exchange market.

At the end of 2023, the Minister of Finance and Coordinating Minister of Economy, Wale Edun disclosed that the Federal Government had received a $2.25bn foreign exchange support facility from the African Import-Export Bank.

According to the minister, the first tranche of its $3.3bn facility from the bank is aimed at resolving FX shortages in the economy.

Commenting on the issue, the Chief Executive Officer, Economic Associates, Dr Ayo Teriba, noted that the volatility of the naira is because of inadequate foreign exchange supply.

He said, “Reserves are low and declining, the CBN is known to be in arrears on some of its obligations. It has started clearing its arrears and has pledged to clear all of it in due course.”

He stated that the government has been making efforts to boost FX supply through investments, but these are yet to materialise, yet.

He declared, “I am optimistic that if the government can walk their thought about opening to investors, we would get the forex to boost reserves and meet the demand in the FX market, and the naira would stabilise. I want to see the N1000/$ as a reflection of FX shortages. I want to hope that Nigeria will in the next few weeks take the right steps.

“We were to take the NNPC to the market last year, but it didn’t happen. These are things we can fast-track. Nigeria has options.”

Teriba highlighted that the recent inflow of $2.3bn as crude forwards won’t solve the country’s supply issues.

He added, “We need to put down enough access to attract foreign exchange inflows. The naira will stabilise, inflation will come down, growth will pick up, and the living standard will improve. If we do not act, the volatility will continue, and this will be a bottomless pit. We need to build a wall of reserves so that the FX market will improve.”

At the Importer & Exporter forex window, it reached a high of 435/$ before closing at 410/$.

Recently, the Association of Bureaux De Change Operators of Nigeria called on the CBN to introduce measures that would counter the advantages of cryptocurrencies exchanges as a channel for diaspora remittances.

In its quarterly economic review report for the first quarter of 2021, ABCON said such measures were necessary to redirect diaspora remittance inflow away from cryptocurrency exchanges to official channels.

Though the association commended the CBN for the N5/$ rebate scheme introduced to encourage diaspora Nigerians to use official channels for remittance transfer, it noted that the apex bank needed to address other issues driving the patronage of cryptocurrency exchanges for a remittance transfer.

It stated, “It is noteworthy that public acceptability for cryptocurrency exchanges is rising which could be quite accountable for the wide drop in diaspora inflows to Nigeria. Insecurity in the country is giving it greater prominence as investors and citizens are finding cryptocurrency a safe haven for their wealth in case of any eventuality. In most emerging markets, Bitcoin transfers surged last year, as the pandemic exposed the cheaper and more efficient digital remittance services. Migrants sending money across borders to their families prefer the minimal transaction costs of cryptocurrency exchanges against the exorbitant costs of traditional money transfer companies like Western Union.”

This brings the Naira closer to the exchange rate unification policy recommended by the International Monetary Fund (IMF) and the World Bank.

This was contained in a weekly update for International Money Transfer Service Operators (IMTOs), signed by O. S. Nnaji, CBN Director, Trade & Exchange Department.

According to the update Bureau De Change (BDC) Operators and Service Providers were instructed to add N6 across all rates.

The exchange rate for the disbursement of IMTOs proceeds is effective Monday, November 30 to Friday, December 4, 2020.

The CBN pegged IMTOs sale of the American currency to banks at N388 to dollar.

Banks sale to CBN was fixed at N389 to dollar; CBN sale to BDCs will be N390 to dollar.

All BDC operators to sell to end-users at not more than N392 to dollar.

Each Bureau De Change is entitled to buy $10,000 weekly.

The apex bank further directed that the Great Britain Pound (GBP) rate should be derived from the US Dollar across rate on the date of sale.

Recall that the apex bank had pegged the exchange rate of the Naira at N380 to the dollar, a move it insisted was not a devaluation of the Nigerian currency.

The CBN however granted the Association of Bureaux De Change Operators of Nigeria its request of going on holiday due to challenges in the local and global economies over the coronavirus pandemic.

While the Naira has crashed in its value due to the low price of crude oil in the international market in recent times, BDC operators have disclosed that there has been a drastic decline in demand for forex due to the impact of coronavirus on the economy.

The apex bank on Friday sold dollars to deposit money banks at the rate of N380 to one dollar signaling the official return of a single exchange rate regime in the country’s foreign exchange market.

The CBN directed banks and Bureau De Change to ensure that the end-user sales of the Dollar should not be more than N380/1USD. The communique was on the disbursement of the proceeds of the International Money Transfer Operator (IMTO).
CBN’s communique which backed the highest official exchange rate between the dollar and naira in over two years, came barely a week after the apex bank denied plan to devalue the Naira.